Students will understand that: Different methods can be used to allocate goods and services. People acting individually or collectively must choose which methods to use to allocate different kinds of goods and services.

Students will be able to use this knowledge to: Evaluate different methods of allocating goods and services, by comparing the benefits to the costs of each method.

Students will understand that: Effective decision making requires comparing the additional costs of alternatives with the additional benefits. Many choices involve doing a little more or a little less of something: few choices "are all or nothing" decisions.

Students will be able to use this knowledge to: Make effective decisions as consumers, producers, savers, investors, and citizens.

Students will understand that: Markets exist when buyers and sellers interact. This interaction determines market prices and thereby allocates scarce goods and services.

Students will be able to use this knowledge to: Identify markets in which they have participated as a buyer and seller and describe how the interaction of all buyers and sellers influences prices. Also, predict how prices change when there is either a shortage or surplus of the product available.